Resale of a flat through p-o-a to real estate broker
This query is : Open
06 July 2011
I would be grateful for an expert opinion and advice on following situation.
Background
I own a flat in Chennai and wanted to sell in last Aug 10. Tenant and his family of five, 2 Adults, 1 Adult daughter and two children , residing in there was keen to buy and said he would by middle of Jan 11.Has been postponing and buying time to register till date. A written notice through a lawyer on 23 Apr 11 stating a reason that I require flat for my own use…was given to tenant to vacate the flat by 31 May 11. Till date he has not vacated. He still says he would buy the flat….but has not. Tenant has been living in my flat throught rental agreement and renewals done till Jul 09. No renewal has been done after that. Tenant has also rented the flat opposite to mine, from its owner. That owner has also asked him to vacate orally about 3 months ago….but tenant has not vacated that flat till date. They have not filed any case or have taken any action legally as yet. Tenant has been regular with paying rents…to both myself and the other owner. A case is being filed on my behalf today in Chennai. By the way....no written agreement has been signed between my Tenant and I for the sale of flat All requests and communications have been done orally through myself and my lawyer.
Current situation
A real-estate broker has offered to buy the flat from me in all white for power of attorney and says he will later take care of vacating the tenant through another power of attorney to another agent or party who may be capable of re possessing the flat from tenant etc.
My question
1.Is the sale to broker through power of attorney wise to consider ….from Tax,legal angles and in saving time factor and mental hassles of court proceedings as this I understand could take a year or more? I have been very prompt tax payer and completely transparent as far as my fincncial situations with IT. And I intend filing LTCG on above should I decide to go through this route.
2.What are the Pluses and minus of going through above broker route ?
THank You
Sincerely
Chandrika
Background
I own a flat in Chennai and wanted to sell in last Aug 10. Tenant and his family of five, 2 Adults, 1 Adult daughter and two children , residing in there was keen to buy and said he would by middle of Jan 11.Has been postponing and buying time to register till date. A written notice through a lawyer on 23 Apr 11 stating a reason that I require flat for my own use…was given to tenant to vacate the flat by 31 May 11. Till date he has not vacated. He still says he would buy the flat….but has not. Tenant has been living in my flat throught rental agreement and renewals done till Jul 09. No renewal has been done after that. Tenant has also rented the flat opposite to mine, from its owner. That owner has also asked him to vacate orally about 3 months ago….but tenant has not vacated that flat till date. They have not filed any case or have taken any action legally as yet. Tenant has been regular with paying rents…to both myself and the other owner. A case is being filed on my behalf today in Chennai. By the way....no written agreement has been signed between my Tenant and I for the sale of flat All requests and communications have been done orally through myself and my lawyer.
Current situation
A real-estate broker has offered to buy the flat from me in all white for power of attorney and says he will later take care of vacating the tenant through another power of attorney to another agent or party who may be capable of re possessing the flat from tenant etc.
My question
1.Is the sale to broker through power of attorney wise to consider ….from Tax,legal angles and in saving time factor and mental hassles of court proceedings as this I understand could take a year or more? I have been very prompt tax payer and completely transparent as far as my fincncial situations with IT. And I intend filing LTCG on above should I decide to go through this route.
2.What are the Pluses and minus of going through above broker route ?
THank You
Sincerely
Chandrika
07 July 2011
THE ONLY PROBLEM IN THIS ARRANGEMENT WILL BE THAT WHEN FLAT FINALL GET REGD THEN U MAY BE ASKED TO PAY TAX ON THE SECTION 50C VALUE BECAUSE ULTIMATELY U WILL BE THE SELLER IN THE BOOKS OF REGISTRY DEPTT
BETTER ENTER INTO AGREEMENT TO SALE CLAERLY SPECIFYING THAT U HAVE GIVEN POSSESSION OF FLAT TO THE SATISFACTION OF BUYER
SINCE THE FLAT IS OCUUPIED BY TENANT HENCE IT CANNOT BE A VACANT POSSESSION BUT POSSESSIN TO THE SATISFACTION OF BUYER MAY BE G9IVEN
CA MANOJ GUPTA
JODHPUR
09828510543
gm2104@gmail.com
BETTER ENTER INTO AGREEMENT TO SALE CLAERLY SPECIFYING THAT U HAVE GIVEN POSSESSION OF FLAT TO THE SATISFACTION OF BUYER
SINCE THE FLAT IS OCUUPIED BY TENANT HENCE IT CANNOT BE A VACANT POSSESSION BUT POSSESSIN TO THE SATISFACTION OF BUYER MAY BE G9IVEN
CA MANOJ GUPTA
JODHPUR
09828510543
gm2104@gmail.com
Message likes :
1 times
07 July 2011
Thank You Mr. Manoj Gupta. Yes...I have been aware of the fact that should the agent register the property for amount higher than what I have been paid (I will be transparent to IT and file for LTCG )...then I seem to become liable for additional tax. However I will take your point and include it as part of POA clause. I assume I could also include a ceiling amount clause for the registration of the property. But the general practise in the Property market seems to be that buyer opts to register for lower amount to avoid higher registration fees and stamp duty. Grateful for your observation. Thank you
Sincerely
Chandrika
Sincerely
Chandrika
07 July 2011
To : Mr Manoj Gupta
Thank You Mr. Manoj Gupta. Yes...I have been aware of the fact that should the agent register the property for amount higher than what I have been paid (I will be transparent to IT and file for LTCG )...then I seem to become liable for additional tax. However I will take your point and include it as part of POA clause. I assume I could also include a ceiling amount clause for the registration of the property. But the general practise in the Property market seems to be that buyer opts to register for lower amount to avoid higher registration fees and stamp duty. Grateful for your observation. Thank you
Sincerely
Chandrika
Thank You Mr. Manoj Gupta. Yes...I have been aware of the fact that should the agent register the property for amount higher than what I have been paid (I will be transparent to IT and file for LTCG )...then I seem to become liable for additional tax. However I will take your point and include it as part of POA clause. I assume I could also include a ceiling amount clause for the registration of the property. But the general practise in the Property market seems to be that buyer opts to register for lower amount to avoid higher registration fees and stamp duty. Grateful for your observation. Thank you
Sincerely
Chandrika
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